Increases to CEO Compensation Might Be Put On Hold For Now at Quickstep Holdings Limited (ASX:QHL)

Shareholders of Quickstep Holdings Limited (ASX:QHL) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 18 November 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Quickstep Holdings

Comparing Quickstep Holdings Limited's CEO Compensation With the industry

According to our data, Quickstep Holdings Limited has a market capitalization of AU$38m, and paid its CEO total annual compensation worth AU$653k over the year to June 2021. Notably, that's a decrease of 15% over the year before. We note that the salary portion, which stands at AU$478.3k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$272m, the reported median total CEO compensation was AU$464k. Accordingly, our analysis reveals that Quickstep Holdings Limited pays Mark Burgess north of the industry median. Furthermore, Mark Burgess directly owns AU$223k worth of shares in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$478k	AU$479k	73%
Other	AU$175k	AU$292k	27%
Total Compensation	AU$653k	AU$771k	100%

On an industry level, around 64% of total compensation represents salary and 36% is other remuneration. Quickstep Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Quickstep Holdings Limited's Growth

Quickstep Holdings Limited's earnings per share (EPS) grew 41% per year over the last three years. Its revenue is up 3.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Quickstep Holdings Limited Been A Good Investment?

Few Quickstep Holdings Limited shareholders would feel satisfied with the return of -30% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Quickstep Holdings that investors should think about before committing capital to this stock.

Important note: Quickstep Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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